SK ecoplant to break ground on Norway’s biggest road project

SK ecoplant, the construction arm under SK Group, will kick off a $2.2 billion road construction project in Norway this year, becoming the first South Korean builder to enter the Nordic market.

The company said Thursday it has recently signed a financial close and a concession agreement with the Norwegian Public Roads Administration for building the Rv555 Sotra Connection, a four-lane road that connects Bergen and Oygarden. The Public Private Partnership (PPP) deal marks the largest single contract in Norwegian history to date.

The recent financial close comes six months after SK’s Sotra Link consortium was named the preferred bidder last September. To bag the final deal, the SK subsidiary successfully secured $860 million (1 trillion won) worth of private investment through project financing. The loan was offered by a syndicate, or group of lenders, that consisted of nine financial institutions including the Export-Import Bank of Korea, the Korea Trade Insurance Corporation, Korea Development Bank, as well as international institutions such as CaixaBank of Spain, KfW of Germany, Crédit Agricole of France, and Bank of China.

The financial close came with a concession agreement, which grants SK ecoplant the right to operate the business. The SK subsidiary gives credit to its extensive experience with globally implementing PPP contracts, notably the Canakkale Bridge and the Eurasia Underwater Tunnel in Turkey, and the Silver Town Tunnel in UK.

“A PPP project in an advanced economy allows us to maximize profitability by reducing financial burden and business risks. We hope to position ourselves as a global developer by landing multiple projects in Europe.” said SK ecoplant CEO Park Kyung-il.

By Ahn Ju-hee (dianahn@heraldcorp.com)